WASHINGTON — Congress’ special deficit-cutting supercommittee bowed to reality Monday and called it quits, with both sides having concluded it was easier to swallow failure than any of the possible compromise deals offered.

Because the Joint Select Committee on Deficit Reduction couldn’t come to an agreement, $1.2 trillion in automatic spending cuts are on track to begin in 2013, with roughly half coming from the Pentagon, The Wall Street Journal reported.

That clears the way for a year-long legislative battle over whether to block those cuts or to replace them with another broad deficit-reduction plan. Republicans — including the chairman of the House Armed Services Committee — already are moving to void or reduce the defense cuts, but President Barack Obama Monday immediately threatened to veto such an effort.

Members of both parties are worried about the impact of the automatic cuts, but it would be even more difficult for them to come to a comprehensive budget agreement to supplant them in an election year than it was for the special deficit committee.

In failing to reach an agreement, members of the supercommittee seemed immune to mounting public disapproval of Congress’ record, and they gambled that fallout on Wall Street and world financial markets wouldn’t be significant or enduring. Washington has now likely punted on addressing the nation’s festering fiscal problems until after next year’s elections.

For financial markets, the outcome was further confirmation of policy makers’ unwillingness to tackle the deficit and contributed to a drop of 248.85 points, or 2.1 percent, in the Dow Jones Industrial Average, which moved back into the red for 2011.

Investors worried in particular that lawmakers or the Pentagon might find ways around some of the cuts, setting the country up for another possible credit-rating downgrade. As the committee foundered, Obama and leaders from both parties seemed powerless or unwilling to twist arms.

Obama was in Asia last week as House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) held a crucial meeting. But neither leader saw in the other any willingness to compromise. They parted after 15 minutes.

The panel’s official deadline is Wednesday, but it needed a deal by midnight Monday because a bill had to be available for 48 hours before any panel vote.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” said a written statement from the panel’s co-chairs, Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas).

Left unresolved are a host of other year-end issues lawmakers hoped the panel would address, including an imminent payroll tax increase and the expiration of extended unemployment benefits. Also left hanging is the fate of the Bush-era tax cuts, which expire at the end of 2012.

At the heart of the failure was mistrust between the parties on the thorniest elements of the national budget, such as taxes, Medicare and Social Security. Concessions on both sides were dismissed as empty gestures. The endgame was dominated by finger pointing in a rehearsal for 2012 campaigns.

Democrats charged their opponents with being defenders of the wealthy, while Republicans accused Democrats of refusing to seriously tackle entitlement spending.

Obama said Republicans’ position on taxes was “the main stumbling block” to a deal and added that “there are still too many Republicans in Congress who have refused to listen to the voices of reason and compromise.”

But Senate Minority Leader Mitch McConnell (R-Ky.) said, “In the end, an agreement proved impossible not because Republicans were unwilling to compromise, but because Democrats would not accept any proposal that did not expand the size and scope of government or punish job creators.”

Defense Secretary Leon Panetta, meanwhile, said the failure to reach an agreement was “a setback for the country’s efforts to achieve fiscal responsibility while protecting our national security.”

“If Congress fails to act over the next year, the Department of Defense will face devastating, automatic, across-the-board cuts that will tear a seam in the nation’s defense,” he continued. “The half-trillion in additional cuts demanded by sequester would lead to a hollow force incapable of sustaining the missions it is assigned. Our troops deserve better, and our nation demands better.”